VOL. 131 | NO. 54 | Wednesday, March 16, 2016
Sparks Fly In Nashville Over Deannexation
By Bill Dries
The Tennessee Legislature’s debate about a proposed deannexation law isn’t a case of Memphis against the rest of the state.
It’s a debate within the Shelby County legislative delegation and with a few exceptions, most of the critics of the measure that would allow referendums to undo annexations that are in some cases 18 years old are Memphis legislators.
The Tennessee House approved the deannexation bill Monday, March 14, in a 68-25 vote after an emotional debate and a tide of amendments that were all voted down on the floor. Another version of the bill awaits action in the state Senate.
House sponsor Mike Carter of Hamilton County said he included Memphis and five other cities in his bill because of complaints he had from annexed residents in those areas in his own statewide survey of the impact of annexations.
“One thing became clear. These were egregious annexations,” Carter said. “Each one of these cities, these citizens have been in litigation or constant protest … since the date it occurred.”
The use of the word “egregious” is essential to the proposal since without it, Carter said the legislation would likely be declared unconstitutional.
Democratic state Rep. Raumesh Akbari of Memphis tried unsuccessfully to amend the word out of the bill.
“This wasn’t an egregious violation,” Akbari said, referring to court rulings backing the annexations as well as state law approved by the legislature. “It was in the confines of the law at the time.”
But Akbari contends that the proposed deannexation bill would be unconstitutional if it only pertains to certain parts of the state. That could be an argument in a legal challenge should the bill become law.
Also voted down by the House was an amendment by Democratic state Rep. Karen Camper of Memphis that would have allowed deannexation referendums specifically in south Cordova and Southwind.
Republican state Rep. Steve McManus of Cordova cited the annexation of south Cordova.
“The folks from south Cordova woke up one morning on July 1, 2012 and they read in the newspaper, ‘You are annexed,’” he said. “We were also told. … ‘You owe taxes for the entire year’. …. Please give the people a chance to vote on their future.”
Republican state Rep. Curry Todd of Collierville said an earlier annexation of other parts of Cordova left those residents “without anyone to speak for them.”
“The homes plummeted in value around that time,” he said. “You could not even sell your house for what it was worth. What they got was taxation without representation.”
Meanwhile, Carter disputed Memphis Mayor Jim Strickland’s claim that the city of Memphis stands to lose approximately $80 million in sales and property tax revenues.
Carter said the estimate in meetings with Memphis leaders and state Comptroller Justin Wilson is $27 million in possible losses.
Carter believes the city is adding in lost revenue from commercial and industrial property that is not included in the bill that would permit residents in annexed areas to petition for a deannexation referendum.
“The general obligation debt of the city of Memphis that accrued during the annexation will continue to be paid,” Carter said in response to questions from Democratic state Rep. G.A. Hardaway. “How in the world would that harm you financially?”
In a statement minutes after the House vote in Nashville, the Strickland administration stood by its $80 million estimate saying there would be a $64 million impact in total property tax revenues including $28 million in residential property tax revenue. The $80 million total tax impact includes $15 million in sales tax revenue.
Strickland, in a written statement, said he is “disappointed” by the House vote.
“But we will continue to share with members of the Senate the facts about the bill’s impact, including the devastating effects it could have not only on Memphis but on our entire region.”
His administration added that no other dollar figures on the impact were offered by those backing the legislation.
Democratic state Rep. Joe Towns sponsored a series of unsuccessful amendments that would have upped the percentage of signatures required on a petition to get a deannexation move on the ballot for a vote. Those signatures would have to be of county voters in the last general election for Tennessee governor.
If the bill becomes law, it would sunset or go off the books in 2019. Petition drives have a 75-day period to garner the necessary signatures.
“You don’t live in our area and we don’t need your help, ever,” Towns said to Carter. “This is not the first time y’all have imposed yourself on our business in Memphis and Shelby County. … What gives you the gall to dictate to us? No one is that smart to tell us what we need to do. Handle your own business in your own backyard and get out of our business.”
Carter defended the bill’s provision that limits the debt obligations of deannexed taxpayers to a pro rata share of general obligation bonds for services in their areas.
“Are you aware that Memphis is borrowing $75 million to $90 million a year on its deficit?” he asked. “There are a lot of people that don’t want to be hung on that debt.”
He also pointed out deannexed residents would likely be paying their share of the debt within the area for more than 18 years after deannexation.